Eskimo-Cool Brands merger set to close
CoolBrands International Inc.'s takeover of Eskimo Pie Corp. is earmarked for an Oct. 6 closing.
The merger move, approved Sept. 6 during a special meeting, has Richmond, VA-based Eskimo Pie becoming a wholly owned subsidiary of Toronto-based CoolBrands or an affiliate of the Canadian corporation
Under the roughly $36 million deal, CoolBrands (formerly Yogen Fruz World-Wide Inc.) is paying $10.25 per share for Eskimo, according to the agreement announced in May. (See related article).
"The merger makes CoolBrands one of the leading marketers of frozen dessert products in every distribution channel, and enhances the competitive strength of the major national brands we market," CoolBrands President/Co-CEO David Stein said Sept. 26.
Eskimo spent 1999 on the defensive while Yogen Fruz relentlessly pursued the company beginning with its initial takeover overture in November 1998. The Canadian company currently owns a 17% share in Eskimo.
The resistance drained Eskimo's coffers. Its FY 1999 financial results reflected special charges of more than $1.2 million linked to the corporation's strategic alternative analysis, $191,000 worth of restructuring charges, and $394,000 in proxy contest expenses. Combined, these expenses (after taxes) pulled the corporation's income down by $1.14 million with its consolidated net income resting at $836,000. (See related article).
In April, Eskimo announced its first-quarter 2000 sales increased 2% vs. the same period a year ago and that its net income jumped a whopping 200%, excluding special charges, which brought the increase down to 93%. Still, the results were the most upbeat the corporation has experienced in four years. (See related article).
"I am extremely proud of our employees, management and board for their efforts in executing the successful financial turnaround of the Company and in structuring the strategic merger with CoolBrands," Eskimo Pie President/Chairman David Kewer said this week.
The frozen novelty marketer's second-quarter profitability barely registered on the radar screen while sales dipped 4%, a situation company leaders in July linked to Eskimo's pending acquisition. (See related article).
Eskimo's net income for the quarter ended June 30 increased by only $4,000 to $1.403 million vs. $1.399 during the FY 1999's second quarter. Sales dipped 4% to rest at $36.7 million compared to $38.3 million during the same period one year ago.
CoolBrands experienced a more than 2% sales drop for its third quarter, company leaders announced in July, citing a decline in bulk ice cream and frozen yogurt sales among other financial woes. However, it enjoyed a 95% profit jump for the quarter ended May 31 of C$1.412 million vs. C$723,000 the same period one year ago.
CoolBrand's brand roster includes I Can't Believe It's Yogurt, Swensen's Ice Cream, Golden Swirl, Bresler's Ice Cream and Java Coast Fine Coffees. It also markets, sells and distributes Tropicana frozen fruit juice bars and frozen dessert products.
Eskimo Pie Corp. credits itself as the creator of the frozen novelty industry in 1921 with the invention of its namesake chocolate-covered ice cream bar on a stick. The company currently markets a slew of novelties, ice cream and sorbet products using several brand names, including Real Fruit, Welch's, SnackWell's and Oreo.
Edited by Gerry Clark